LITHIA MOTORS INC (LAD) Stock Fundamental Analysis
USA - NYSE:LAD - US5367971034 - Common Stock
331.6 USD
+6.86 (+2.11%)
331.6 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to LAD. LAD was compared to 120 industry peers in the Specialty Retail industry. There are concerns on the financial health of LAD while its profitability can be described as average. LAD scores decently on growth, while it is valued quite cheap. This could make an interesting combination.
1. Profitability
1.1 Basic Checks
LAD had positive earnings in the past year.
LAD had a positive operating cash flow in the past year.
Each year in the past 5 years LAD has been profitable.
In multiple years LAD reported negative operating cash flow during the last 5 years.
1.2 Ratios
With a decent Return On Assets value of 3.69%, LAD is doing good in the industry, outperforming 63.03% of the companies in the same industry.
Looking at the Return On Equity, with a value of 12.75%, LAD is in the better half of the industry, outperforming 68.91% of the companies in the same industry.
LAD has a Return On Invested Capital (5.61%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for LAD is below the industry average of 11.91%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.69% | ||
| ROE | 12.75% | ||
| ROIC | 5.61% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.4%
ROE(5y)18.55%
ROIC(3y)7.58%
ROIC(5y)8.54%
1.3 Margins
LAD has a Profit Margin of 2.40%. This is in the better half of the industry: LAD outperforms 63.87% of its industry peers.
LAD's Profit Margin has been stable in the last couple of years.
LAD's Operating Margin of 4.53% is fine compared to the rest of the industry. LAD outperforms 64.71% of its industry peers.
LAD's Operating Margin has improved in the last couple of years.
The Gross Margin of LAD (15.45%) is worse than 86.55% of its industry peers.
LAD's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.53% | ||
| PM (TTM) | 2.4% | ||
| GM | 15.45% |
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
2. Health
2.1 Basic Checks
LAD has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
LAD has less shares outstanding than it did 1 year ago.
The number of shares outstanding for LAD has been increased compared to 5 years ago.
The debt/assets ratio for LAD is higher compared to a year ago.
2.2 Solvency
LAD has an Altman-Z score of 2.49. This is not the best score and indicates that LAD is in the grey zone with still only limited risk for bankruptcy at the moment.
LAD has a Altman-Z score (2.49) which is in line with its industry peers.
The Debt to FCF ratio of LAD is 42.52, which is on the high side as it means it would take LAD, 42.52 years of fcf income to pay off all of its debts.
LAD's Debt to FCF ratio of 42.52 is in line compared to the rest of the industry. LAD outperforms 47.06% of its industry peers.
A Debt/Equity ratio of 1.95 is on the high side and indicates that LAD has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.95, LAD is doing worse than 70.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 42.52 | ||
| Altman-Z | 2.49 |
ROIC/WACC0.62
WACC9.01%
2.3 Liquidity
A Current Ratio of 1.22 indicates that LAD should not have too much problems paying its short term obligations.
LAD has a Current ratio (1.22) which is in line with its industry peers.
A Quick Ratio of 0.29 indicates that LAD may have some problems paying its short term obligations.
LAD has a worse Quick ratio (0.29) than 79.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.22 | ||
| Quick Ratio | 0.29 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 15.64% over the past year.
Measured over the past years, LAD shows a very strong growth in Earnings Per Share. The EPS has been growing by 20.64% on average per year.
Looking at the last year, LAD shows a quite strong growth in Revenue. The Revenue has grown by 8.42% in the last year.
Measured over the past years, LAD shows a very strong growth in Revenue. The Revenue has been growing by 23.35% on average per year.
EPS 1Y (TTM)15.64%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%15.71%
Revenue 1Y (TTM)8.42%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%4.93%
3.2 Future
Based on estimates for the next years, LAD will show a quite strong growth in Earnings Per Share. The EPS will grow by 16.12% on average per year.
The Revenue is expected to grow by 6.01% on average over the next years.
EPS Next Y17.53%
EPS Next 2Y12.34%
EPS Next 3Y12.23%
EPS Next 5Y16.12%
Revenue Next Year4.05%
Revenue Next 2Y4.39%
Revenue Next 3Y5.82%
Revenue Next 5Y6.01%
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 9.42, which indicates a very decent valuation of LAD.
89.08% of the companies in the same industry are more expensive than LAD, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of LAD to the average of the S&P500 Index (26.91), we can say LAD is valued rather cheaply.
LAD is valuated reasonably with a Price/Forward Earnings ratio of 8.76.
Based on the Price/Forward Earnings ratio, LAD is valued cheaply inside the industry as 89.08% of the companies are valued more expensively.
LAD is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.92, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.42 | ||
| Fwd PE | 8.76 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, LAD is valued a bit cheaper than 64.71% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of LAD indicates a somewhat cheap valuation: LAD is cheaper than 68.07% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.4 | ||
| EV/EBITDA | 8.59 |
4.3 Compensation for Growth
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
A more expensive valuation may be justified as LAD's earnings are expected to grow with 12.23% in the coming years.
PEG (NY)0.54
PEG (5Y)0.46
EPS Next 2Y12.34%
EPS Next 3Y12.23%
5. Dividend
5.1 Amount
LAD has a yearly dividend return of 0.68%, which is pretty low.
LAD's Dividend Yield is a higher than the industry average which is at 5.32.
Compared to an average S&P500 Dividend Yield of 2.32, LAD's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.68% |
5.2 History
The dividend of LAD is nicely growing with an annual growth rate of 11.85%!
LAD has been paying a dividend for at least 10 years, so it has a reliable track record.
LAD has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.85%
Div Incr Years11
Div Non Decr Years11
5.3 Sustainability
6.34% of the earnings are spent on dividend by LAD. This is a low number and sustainable payout ratio.
The dividend of LAD is growing, but earnings are growing more, so the dividend growth is sustainable.
DP6.34%
EPS Next 2Y12.34%
EPS Next 3Y12.23%
331.6
+6.86 (+2.11%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners102.22%
Inst Owner Change-0.44%
Ins Owners0.88%
Ins Owner Change-0.31%
Market Cap8.50B
Revenue(TTM)37.61B
Net Income(TTM)890.90M
Analysts83.16
Price Target394.85 (19.07%)
Short Float %7.13%
Short Ratio6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.68% |
Yearly Dividend2.1
Dividend Growth(5Y)11.85%
DP6.34%
Div Incr Years11
Div Non Decr Years11
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)4.06%
Min EPS beat(2)-1.6%
Max EPS beat(2)9.71%
EPS beat(4)3
Avg EPS beat(4)5.43%
Min EPS beat(4)-1.6%
Max EPS beat(4)9.71%
EPS beat(8)4
Avg EPS beat(8)-0.11%
EPS beat(12)5
Avg EPS beat(12)-0.63%
EPS beat(16)8
Avg EPS beat(16)2.53%
Revenue beat(2)0
Avg Revenue beat(2)-2.19%
Min Revenue beat(2)-2.33%
Max Revenue beat(2)-2.05%
Revenue beat(4)1
Avg Revenue beat(4)-1.94%
Min Revenue beat(4)-3.72%
Max Revenue beat(4)0.33%
Revenue beat(8)1
Avg Revenue beat(8)-1.98%
Revenue beat(12)2
Avg Revenue beat(12)-2.05%
Revenue beat(16)5
Avg Revenue beat(16)-0.86%
PT rev (1m)0.04%
PT rev (3m)-2.11%
EPS NQ rev (1m)-0.81%
EPS NQ rev (3m)1.72%
EPS NY rev (1m)0.17%
EPS NY rev (3m)6.59%
Revenue NQ rev (1m)-0.11%
Revenue NQ rev (3m)-1.01%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-1.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 9.42 | ||
| Fwd PE | 8.76 | ||
| P/S | 0.23 | ||
| P/FCF | 26.4 | ||
| P/OCF | 13.88 | ||
| P/B | 1.22 | ||
| P/tB | 4.87 | ||
| EV/EBITDA | 8.59 |
EPS(TTM)35.19
EY10.61%
EPS(NY)37.84
Fwd EY11.41%
FCF(TTM)12.56
FCFY3.79%
OCF(TTM)23.89
OCFY7.2%
SpS1449.13
BVpS272.48
TBVpS68.05
PEG (NY)0.54
PEG (5Y)0.46
Graham Number464.49
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.69% | ||
| ROE | 12.75% | ||
| ROCE | 9.53% | ||
| ROIC | 5.61% | ||
| ROICexc | 5.67% | ||
| ROICexgc | 7.4% | ||
| OM | 4.53% | ||
| PM (TTM) | 2.4% | ||
| GM | 15.45% | ||
| FCFM | 0.87% |
ROA(3y)5.63%
ROA(5y)6.47%
ROE(3y)17.4%
ROE(5y)18.55%
ROIC(3y)7.58%
ROIC(5y)8.54%
ROICexc(3y)7.8%
ROICexc(5y)8.76%
ROICexgc(3y)10.26%
ROICexgc(5y)11.04%
ROCE(3y)12.38%
ROCE(5y)13.83%
ROICexgc growth 3Y-22.88%
ROICexgc growth 5Y-1.28%
ROICexc growth 3Y-24.14%
ROICexc growth 5Y-3.26%
OM growth 3Y-15.89%
OM growth 5Y2.61%
PM growth 3Y-21.85%
PM growth 5Y0.64%
GM growth 3Y-6.17%
GM growth 5Y-0.01%
F-Score6
Asset Turnover1.54
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.95 | ||
| Debt/FCF | 42.52 | ||
| Debt/EBITDA | 6.91 | ||
| Cap/Depr | 100.87% | ||
| Cap/Sales | 0.78% | ||
| Interest Coverage | 2.29 | ||
| Cash Conversion | 31.1% | ||
| Profit Quality | 36.14% | ||
| Current Ratio | 1.22 | ||
| Quick Ratio | 0.29 | ||
| Altman-Z | 2.49 |
F-Score6
WACC9.01%
ROIC/WACC0.62
Cap/Depr(3y)135.76%
Cap/Depr(5y)158.69%
Cap/Sales(3y)0.93%
Cap/Sales(5y)1.04%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)15.64%
EPS 3Y-8.87%
EPS 5Y20.64%
EPS Q2Q%15.71%
EPS Next Y17.53%
EPS Next 2Y12.34%
EPS Next 3Y12.23%
EPS Next 5Y16.12%
Revenue 1Y (TTM)8.42%
Revenue growth 3Y16.59%
Revenue growth 5Y23.35%
Sales Q2Q%4.93%
Revenue Next Year4.05%
Revenue Next 2Y4.39%
Revenue Next 3Y5.82%
Revenue Next 5Y6.01%
EBIT growth 1Y4.38%
EBIT growth 3Y-1.94%
EBIT growth 5Y26.57%
EBIT Next Year17.12%
EBIT Next 3Y11.35%
EBIT Next 5Y11.07%
FCF growth 1Y135.41%
FCF growth 3Y-63.67%
FCF growth 5Y-28.69%
OCF growth 1Y194.86%
OCF growth 3Y-38.16%
OCF growth 5Y-4.12%
LITHIA MOTORS INC / LAD FAQ
What is the fundamental rating for LAD stock?
ChartMill assigns a fundamental rating of 5 / 10 to LAD.
What is the valuation status of LITHIA MOTORS INC (LAD) stock?
ChartMill assigns a valuation rating of 7 / 10 to LITHIA MOTORS INC (LAD). This can be considered as Undervalued.
How profitable is LITHIA MOTORS INC (LAD) stock?
LITHIA MOTORS INC (LAD) has a profitability rating of 5 / 10.
How financially healthy is LITHIA MOTORS INC?
The financial health rating of LITHIA MOTORS INC (LAD) is 2 / 10.
Can you provide the dividend sustainability for LAD stock?
The dividend rating of LITHIA MOTORS INC (LAD) is 6 / 10 and the dividend payout ratio is 6.34%.